The company's 2023H1 realized revenue of 253 million yuan, + 114% compared with the same period last year, and realized deduction of non-return net profit of 1.62 million yuan, turning losses into profits compared with the same period last year; in a single quarter, 2023Q2 realized revenue of 155 million yuan, + 108% year-on-year, + 56.5% month-on-month, and deducted non-return net profit of 3.84 million yuan, turning losses and month-on-month comparison into profits, and the company's fundamentals continued to improve. The global permeability of new energy vehicles continues to rise. As the supporting basic equipment to support the development of new energy vehicles, charging piles, driven by both policy-side and demand-side factors, are expected to enter a period of accelerated construction in the future. At present, the company focuses on the field of new energy charging and energy storage, with profound technology accumulation, complete product matrix and perfect service system, while actively opening up customers at home and abroad to create the coordinated development of optical storage and charging integration, which is expected to usher in high-speed growth. Maintain the company's 2024 target market value of about 6.2 billion yuan, corresponding to the target price of about 12 yuan, maintain the "buy" rating.

Matters: green Energy Huichong recently released the 2023 mid-term report. In this regard, our comments are as follows:

23H1 revenue doubled compared with the same period last year, and net profit turned into profit. The company's 2023H1 realized revenue of 253 million yuan, + 114% compared with the same period last year, realized net profit of 3.6 million yuan, turned losses into profits, deducted non-return net profit of 1.62 million yuan, and turned losses into profits. In a single quarter, 2023Q2 achieved revenue of 155 million yuan, + 108% year-on-year and + 56.5% month-on-month, and realized a net profit of 4.29 million yuan,-29.9% year-on-year, turned losses into profits, deducted non-return net profit of 3.84 million yuan, and turned losses into profits. The company acquired green energy technology in 2022 to further focus on new energy charging and energy storage business. 2023H1's revenue doubled, mainly due to a substantial increase in revenue from the new energy business segment and a turnround in net profit, mainly due to the divestiture of the thermoelectric business, which lost money in the same period last year.

Benefiting from the accelerated construction of charging piles, the company's new energy business has increased significantly. From a business point of view, the company's 2023H1 new energy / railway transport business division respectively achieved revenue of 2.36 billion yuan, accounting for 93% of revenue, 7% of revenue, and 5.77% of revenue compared with the same period last year. On a quarterly basis, we expect 23Q2's new energy business revenue to be about 150 million yuan, a month-on-month growth of more than 60 percent. According to the data of China charging Alliance, the national charging infrastructure increment of 2023H1 is 1.442 million, of which 351000 are public charging piles and 1.091 million are private charging piles. As of June 2023, the cumulative number of charging infrastructure nationwide reached 6.652 million, an increase of 69.8 percent over the same period last year. Downstream demand continues to be strong, and the company is expected to continue to benefit from accelerated construction of charging pile equipment.

The gross profit margin increased compared with the same period last year, and the expense rate fell sharply during the period. 2023H1's comprehensive gross profit margin is 24.7%, year-on-year + 4.07pcts, period expense rate is 23.2%, year-on-year-5.19pcts. From a quarterly point of view, 2023Q2's comprehensive gross profit margin is 23.9%, year-on-year + 0.50pct, month-on-2.04pcts, period expense rate is 20.92%, year-on-year-6.38pcts, month-on-5.97pcts, of which: sales / management / R & D / financial expense rate is 8.90%, 7.34%, 4.61%, 0.07%, and + 1.07/-6.95/+0.18/-0.67pct, respectively. Ring ratio-6.31/+0.36/+0.54/-0.55pct. The company's gross profit margin has increased compared with last year, mainly due to a substantial increase in revenue from the charging pile business with high gross margin; at the same time, after the divestiture of the thermoelectric business and focusing on the new energy business, the company's operating efficiency has been improved, and the expense rate has decreased significantly during the period.

Technology, products and services create competitive advantages, and the integrated layout of going out to sea and optical storage and charging brings long-term growth. The main points of the company are: 1) strong technical strength, rich product matrix and comprehensive marketing services. Most of the core members of Green Energy Huichong have the work experience of Emerson, Trent, Special change electrician and other leaders in the electrical industry; the company pioneered star-ring power distribution technology in the country, adopting modular structure, and the power distribution unit can intelligently deploy the charging module according to the charging demand, and each module can be switched separately to improve equipment utilization; in addition, the company's charging pile product matrix is comprehensive and the service system is perfect. 2) full orders on hand, diversified customer structure and accelerated overseas layout. At present, the company has full orders for charging piles, with a wide range of downstream customers and diverse structures, and has established cooperative relations with well-known customers at home and abroad, such as State Grid, Petrochina, Xiaogu charging, British BP, Shell and so on. 3) the integrated and coordinated development of "optical storage and charging" has a broad prospect in the future. In 2021, the company joined hands with Xi'an Jiaotong University to establish a Digital Energy Research Institute to continuously promote the research of V2G, integrated charge and discharge inspection, automatic charging, super charging, wireless charging, distributed comprehensive energy application and other technologies in the charging ecology of new energy vehicles. In the future, the company is expected to carry out the integrated and coordinated development of "optical storage and charging" by virtue of the layout in the field of charging, energy storage and microgrid.

Risk factors: the sales of new energy vehicles are not as expected; the development of high-pressure fast charging technology is not as expected; the subsidy policy of charging piles is not as expected; the market competition is intensified; the progress of the company's charging pile business going out to sea is not as expected.

Investment suggestion: the net return profit of the company from 2023 to 2025 is predicted to be 0.64 million yuan, and the corresponding EPS in 2023-2025 is 0.12 PE 0.39 billion yuan, respectively, and the current price is 2023-2025 times that of 73-22-12. The global permeability of new energy vehicles continues to rise. As the supporting basic equipment to support the development of new energy vehicles, charging piles, driven by both policy-side and demand-side factors, are expected to enter a period of accelerated construction in the future. At present, the company focuses on the field of new energy charging and energy storage, with profound technology accumulation, complete product matrix and perfect service system, while actively opening up customers at home and abroad to create the coordinated development of optical storage and charging integration, which is expected to usher in high-speed growth. We select Tonghe Technology, Shenghong shares, Trent and Daotong Technology in the charging pile industry as comparable companies, using PE valuation method, with reference to the comparable company's average PE valuation of about 31x in 2024 (based on Wind consensus expectations), give the company a 2024 31x valuation, maintain the company's 2024 target market capitalization of about 6.2 billion yuan, maintain the target price of about 12 yuan, and maintain a "buy" rating.